Affirm stock price could form a rare golden cross pattern soon
Affirm (NASDAQ: AFRM) stock price has made a strong recovery in the past few months as technology shares jump and FOMO mood sets in. The shares jumped to $19.26, the highest level since February 3rd of this year. It has jumped by over 117% from the lowest point this year. Still, the shares remain sharply below its all-time high of $176.
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Affirm, the leading Buy Now Pay Later (BNPL) company, has made some progress this year. The most recent news came on Wednesday when Amazon announced that it will add the platform in its adaptive checkout product. This means that customers who select Amazon Pay can now use Affirm to make their payments in equal instalments
Affirm has been live in Amazon since 2021. As such, the decision by Amazon to add it as a payment option in its adaptive checkout means that it sees value in the product. This is also notable because Amazon is the biggest player in e-commerce in the United States, as we wrote here.
Affirm stock price also jumped after the company announced that it would repurchase $800 million of its principle outstanding convertible senior notes due in 2026. A likely reason for this is that they want to sell another longer-dated convertible bond at a better price.
Affirm’s business has been showing some signs of life in the past few months. The most recent results showed that the company’s active customer jumped by 26% in Q1 to over 16 million. Transaction per active customer rose to 3.6 while revenue jumped to $381 million.
A bullish case can be made about the company. It has a strong market share in the US, where it is facing substantial competition from PayPal and Affirm. Affirm also has a route to profitability, with analysts expecting it to break even in the next few years.
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Affirm stock price forecastCopy link to section
The daily chart shows that the AFRM stock price has been in a strong bullish trend in the past few weeks. It crossed the 50-day moving average in May this year. And now, it has moved to the 200-day moving average. If there is more upside, the stock will likely form a golden cross, which is usually a bullish sign.
Affirm shares are also approaching the important resistance point at $22.94, the highest level on February 2. A move above this level, coupled with a golden cross could push the stock sharply higher in the coming months. If this happens, the next level to watch will be at $30.